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Domains of Organizational Effectiveness in Colleges and Universities Author(s): Kim S. Cameron Source: The Academy of Management Journal, Vol. 24, No. 1 (Mar., 1981), pp. 25-47Published by: Academy of ManagementStable URL: http://www.jstor.org/stable/255822Accessed: 10-08-2015 14:52 UTC

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? Academy of Management Journal 1981, Vol. 24, No. 1, 25-47.

Domains of Organizational Effectiveness

in Colleges and Universities1

KIM S. CAMERON University of Wisconsin

Four major domains of organizational effectiveness in colleges and universities are identified-academic, morale, external adaptation, and extracurricular domains-and four types of institutions are found that differ significantly in the domains of effectiveness in which they excel. Among the major institutional characteristics that predict domain effectiveness are type of academic program offered, institutional affluence, and institutional stability.

A variety of approaches to the definition of organizational effectiveness has been taken. These different approaches generally have emerged from different conceptualizations of the meaning of an organization. That is, organizations have been viewed as rational entities in pursuit of goals (Per- row, 1970), as coalitions reacting (or proacting) to strategic constituencies (Pfeffer & Salancik, 1978), as individual need-meeting cooperatives (Cum- mings, 1977; Keeley, 1978), as meaning-producing systems (Pondy & Mitroff, 1978; Weick, 1978), as information processing systems (Gal- braith, 1975), and so on. As the conceptualization of what an organization is changes, so do the definitions and approaches to organizational effectiveness.

Four approaches to defining organizational effectiveness have received particular attention. The most widely used is the goal model (including both operative and official goals), which defines effectiveness as the extent to which the organization accomplishes its goals (Etzioni, 1964; Campbell, 1977; Price, 1972; Scott, 1977). One problem with this approach is that an organization may be judged to be effective in areas outside its goal domain. For example, NASA was very effective in the 1960s in producing useful consumer products aside from its primary goal to reach the moon,

'Special thanks are given to Larry Cummings and Randy Dunham for comments during the preparation of this manuscript. This research was funded by grant #91-09-77029 of the Employment and Training Administration, U.S. Department of Labor. This report does not necessarily represent the official opinion or policy of the Department of Labor, and the researcher is solely responsible for its contents.

25



Academy of Management Journal

and the Liggett and Myers Tobacco Company became so successful at sell- ing dog food that it was sued in the early 1970s for holding a monopoly. Also, the organization may be ineffective even when accomplishing its goals if the goals are too low, misplaced, or harmful. For example, Boise Cascade set a goal of increasing company earnings by 20 percent each year and met that goal for twelve years. However, in order to do so the firm de- veloped a norm of taking on risky projects that led to their demise and forced reorganization in 1972 (McDonald, 1975).

The second approach to effectiveness, the system resource model focuses on the ability of the organization to obtain needed resources. In- puts replace outputs as the primary consideration (Yuchtman & Seashore, 1967). Organizations, however, may prove to be effective even when inputs are not optimal and when a competitive advantage in the resource market place does not exist. For example, the "no name" Seattle Super- sonics did not succeed in attracting superstars for their ball team but still reached the NBA championship finals in 1978 and won in 1979. Further- more, Molnar and Rogers (1976) suggest that in nonprofit organizations the acquisition of inputs is not tied to the production of outputs. Conse- quently, resource acquisition (inputs) cannot be used as a legitimate criterion of effectiveness.

A third approach is the process model, wherein effectiveness is equated with internal organizational health, efficiency, or well-oiled internal processes and procedures. Argyris (1964), Bennis (1966), and Likert (1967) represent points of view that fit under this rubric. Again, however, an organization may be effective even when organizational health is low and internal processes are questionable (e.g., the strife-ridden World Champion New York Yankees in 1977 and 1978 who, despite poor internal health, still won the World Series). In addition, in turbulent external environ- ments, the presence of organizational slack (unused, convertible resources) may indicate inefficiency in internal processes while being essen- tial for long term organization survival and adaptability.

The fourth approach is the ecological model (Miles, 1980) or the partici- pant satisfaction model (Keeley, 1978). Effectiveness is defined in terms of the degree to which the needs and expectations of strategic constituencies are met by the organization. (Keeley suggests that the minimization of regret is a better way of stating the criterion.) This approach can be viewed either as a summary measure for an organization (e.g., the average or min- imal satisfaction levels for all constituencies) or as a series of different scores from a variety of constituencies (e.g., where score variance becomes critical). It mainly emphasizes constituencies outside the organization, and the most effective organization is that which at least minimally satisfies, or reduces the regret of these major strategic constituencies. See Steers (1977).

Organizations may ignore strategic constituencies, however, in seeking effectiveness, and they may achieve success in spite of conflicting or contradictory constituency expectations. This is particularly true in charisma- tically led organizations. For example, Clark (1970) gives an account of

26 March



the development of the prestigious "Swarthmore saga" by Frank Ayde- lotte despite external constituency resistance. The growth and expansion of the newly formed Mormon church in the 1880s despite resistance, per- secution, and even an "extermination order" in Missouri is another example.

Each of these approaches has certain advantages as a research and theoretical tool, but each also has weaknesses (Cameron, 1980). Because each of these models is analytically independent, one approach may be appropriate in certain circumstances or with certain types of organizations for which other models are not appropriate. One major consideration in determining which model is most appropriate in assessing effectiveness is the domain of activity in which the organization is operating. For example, the strategic constituencies approach may be most applicable in an organization operating in multiple domains, where outcomes are obscure, or when required to respond to a diverse group of constituency demands. The goal model, on the other hand, is not appropriate in those types of organizational settings but is most appropriate when organizational domains are narrowly defined, goals are consensual, or when outcomes are easily identifiable.

Organizational domains generally refer to the population served, the technology employed, and the services rendered by the organization (Meyer, 1975). These domains may arise from choices made by dominant coalition members concerning what activities are to be emphasized, what the organization already knows how to do, and what evaluation criteria can be agreed upon (Lindblom, 1959; March & Simon, 1958; Thompson, 1967; Weick, 1979), or they may be officially prescribed for an organization by external mandate, such as with government agencies, certain service organizations, or educational institutions. Organizations frequently operate in multiple domains, but few organizations maximize effectiveness in all of their domains. More generally, organizations are effective in a limited number of domains and ineffective in the others (Cyert & March, 1963; Pennings & Goodman, 1977; Steers, 1977). In fact, achieving effectiveness in one domain may mitigate against achieving effectiveness in other domains. For example, a university faculty may unionize in order to enhance individual or subunit resource acquisition (e.g., increasing faculty power, salaries, fringe benefits, grievance resolutions), but at the same time may destroy internal organizational health (e.g., creating adversarial relationships among organizational constituencies, undermining "system 4" characteristics, etc.).

Meyer (1975) points out that organizational domains in the not-for- profit sector are much more vague and ill-defined than in the for-profit sector, and that the performance of not-for-profit organizations in their domains frequently cannot be evaluated. In institutions of higher education, for example, domain dissensus and lack of clarity about primary tasks has been a consistent theme in the literature (Hutchins, 1977). Good evaluations of organizational effectiveness, therefore, have been absent.

1981 Cameron 27




This study sets out first to identify empirically the major domains that typify colleges and universities and to assess levels of effectiveness in each of those domains. Second, it attempts to determine the characteristics of institutions that explain the differences in domains of effectiveness among institutions of higher education. No research to date has addressed these topics.

METHOD

Instrument

An instrument reported in Cameron (1978a) was used to identify and assess the major characteristics of colleges and universities that are associated with effectiveness. That is, characteristics and activities of institutions of higher education that were judged by approximately 40 administrators and faculty members to be indicative of effective organizational performance were used as the groundwork for identifying organizational domains. The problem in the past with identifying domains in colleges and universities has been that when asked, administrators and faculty members cannot give useful answers. Gross and Grambsch (1968) found, for example, that when senior faculty members and administrators were asked to rate the importance to their institution of 47 goals in a wide variety of domains, all the goals were rated as being important. That is, respondents were unable to differentiate consciously among the importance of a wide variety of domains for their institutions.

The approach taken in this study is to use ratings of the extent to which an institution is typified by certain characteristics of effective institutions that represent a variety of different domains. These ratings then are com- bined in such a way as to identify the important domains of the institutions and their effectiveness in each domain.

Institutional Sample

Selected for inclusion in the study were 41 colleges and universities in 7 states in the northeast United States. Of the 41 institutions, 44 percent have faculty unions, 56 percent do not; 41 percent are public, 59 percent are private. Institutional age ranges from 12 years (two institutions) to over 200 years (two institutions). Only a bachelor's degree is offered by 17 percent, master's degrees are offered by 53 percent, and Ph.D.s by 29 percent. Size indicators range from just under 1,000 undergraduate students enrolled to just over 11,000; 5 institutions have less than 10 academic de- partments, and five have over 30. Confidentiality was promised to each institution, hence names of schools are not included in this paper.

28 March



Respondent Sample

In each of the 41 institutions, approximately 55 academic department heads and administrators (dominant coalition members) received a ques- tionnaire requesting that they rate the extent to which their institution possessed characteristics judged to be indicative of effectiveness. Items used to measure effectiveness are listed in Table 1.

Of the questionnaires distributed, 61 percent (1,317) were returned. Re- turn rates across institutions ranged from 40 percent to 77 percent, and re- sponses across the 5 job categories (general, academic, financial, and student affairs administrators, and academic department heads) ranged from 55 percent to 69 percent. Respondents included 610 academic department heads and 707 administrators.

Analyses

Data analysis relied on three separate procedures. First, the question- naire items were examined to determine if separate dimensions of organizational effectiveness could be identified for each institution. Cameron's (1978a) study suggests that nine separate dimensions should emerge from these items, and psychometric tests are needed to determine if those dimensions generalize to this larger sample of institutions.

Second, in order to identify the organizational domains represented by these nine dimensions of effectiveness, institutional scores on the nine dimensions were submitted to a clustering procedure to determine which of the dimensions group together and whether institutions can be identified that clearly excel in a particular domain. A variety of clustering procedures is available (Hartigan, 1975; Johnson, 1967), and since no agreed upon criteria exist for determining which clustering algorithm produces the best results (Hartigan, 1975; Arabie & Boorman, 1973), a clustering algorithm was selected that produces the set of clusters that are most inter- pretable, or for which statements regarding similarities and differences among the groups can be made. This algorithm, called CONCOR, was in- troduced by Breiger, Boorman, and Arabie (1975). Whereas applying the criterion of "meaningfulness" of clusters is a subjective endeavor, no ob- jective criteria are available, and meaningfulness of results is the most practical criterion for purposes of this study.

The third part of the analysis focused on explaining the differences among institutions that differ in their domain effectiveness. That is, the task was to identify institutional characteristics possessed by one institutional group that are not possessed by other groups. Discriminant analysis, a statistical technique that weights and linearly combines variables so that groups are forced to be as different as possible on the linear combina- tions, was applied in order to differentiate the institutional groups based on their effectiveness in the domains. A number of discriminant functions is produced by this procedure (up to the number of groups minus one),

1981 Cameron 29



o

TABLE 1 Items, Dimensions, and Definitions of Organizational Effectiveness in Institutions of Higher Education

Dimension Definition Items

1. Student educational satisfaction The degree of satisfaction of students with their Xi i Manifested student dissatisfaction

2. Student academic development

3. Student career development

4. Student personal development

5. Faculty and administrator employment satisfaction

6. Professional development and quality of the faculty

educational experiences at the institution.

The extent of academic attainment, growth, and progress of students at the institution.

The extent of occupational development of students, and the emphasis on career development and the opportunities for career development provided by the institution.

Student development in nonacademic, noncareer oriented areas, e.g., socially, emotionally, culturally, and the emphasis on personal development and opportunities provided by the institution for personal development. Satisfaction of faculty members and administrators with their jobs and employment at the institution.

The extent of professional attainment and development of the faculty, and the amount of stimulation toward professional development provided by the institution.

Xi2 Received student complaints X13 Attrition resulting from dissatisfaction X14 School spirit displayed X21 X22 X23 X24 X25

X31 X32 X33 X34 X35

Amount of extra work and study by students Level of student academic attainment Number going on to graduate schools Amount of student academic development Emphasis on outside academic activities Number of students employed in major field Extent to which career goals are met Number of career oriented courses Number of students obtaining jobs of first choice Importance of career education for job attainment

X41 Opportunitites for personal development X42 Nonacademic growth X43 Emphasis on nonacademic activities X44 Importance of personal development

X51 Faculty preference for this institution over others X52 Administrator preference for this institution over

others X53 Faculty satisfaction with employment X54 Administrator satisfaction with employment X55 Faculty satisfaction with the school X56 Administrator satisfaction with the school X61 Faculty attendance at professional conferences X62 Faculty publications X63 Teaching at the "cutting edge" X64 Awards received by the faculty X65 Amount of professional development

t

c-J s

Zr



00 00

TABLE 1 (cont.) Items, Dimensions, and Definitions of Organizational Effectiveness in Institutions of Higher Education

Dimension Definition Items

7. System openness and community interaction

8. Ability to acquire resources

9. Organizational health

The emphasis placed on interaction with, adaptation to, and service in the external environment.

The ability of the institution to acquire resources from the external environment, such as good students and faculty, financial support, etc.

The benevolence, vitality, and viability in the internal processes and practices at the institution.

X71 X72 X73 X74 X75

X81 X82 X83 X84 X85 X86

Community service of employees Professional activities outside the college Emphasis on community relations Community programs sponsored Adaptiveness to external environment National reputations of faculty Drawing power for local students Drawing power for national students Drawing power for faculty Drawing power for financial resources Ability to acquire resources

X9g Student/faculty relations X92 Intergroup relations X93 Amount of feedback obtained X94 Typical communication type X95 Presence of cooperative environment X96 Flexibility of administration X97 Levels of trust X98 Amount of conflict and frustration X99 Problem solving styles used X9gl Use of talents and expertise Xg9l Types of supervision and control X912 Types and adequacy of recognition and rewards X9g3 Decision making styles X914 Amount of power associated with participation Xg15 Equity of treatment and rewards X9g6 Organizational health X917 Long term planning and goal setting X918 Intellectual orientation

s




each of which independently discriminates among the groups of institutions.

The explanatory variables used in the discriminant analysis were selected because they have been found in other research to have some relationship to organizational effectiveness. These variables are grouped into the following categories: (1) perceptions of organizational structure and dimensions of the external environment, (2) the strategic emphases of top administrators, (3) organizational goal preferences, (4) financial indicators, and (5) organizational demographics. Table 2 lists the variables in

TABLE 2 Predictor Variables Used in Differentiating Among Effectiveness

Domains (with References and Reliability Coefficients)

Organizational Structure and Organizational Environment

(Duncan, 1973; Hirsch, 1975; Ivancevich & Donnelly, 1975; Miles & Cameron, 1977; Negandhi & Reimann, 1973; Osborn & Hunt, 1974; Pennings, 1975, 1976; Reimann, 1974) Environmental richness (89) Environmental turbulence (74) Environmental control (74) Environmental support (74) Centralization (61) Standardization (61) Professionalization (61)

Strategic Emphases of Administrators (Child, 1974, 1975; Miles, 1980; Miles & Cameron, 1977; Miles, Snow & Pfeffer, 1974) Internal/external (55) Proactive/reactive (77) Finances and budgetingb Academics and scholarshipb Legal mattersb Students affairsb Fund raisingb Public serviceb Politics and public relationsb

Organizational Goals (Campbell, 1977; Molnar & Rogers, 1976; Price, 1972; Scott, 1977; Steers, 1977) Goal clarity (98) Importance of goals concerning:d

Student educational satisfaction Student academic development Student career development Student personal development Faculty/administrator satisfaction Professional development of faculty Community interaction and system openness Acquiring resources from the environment Organizational health

Financial Variables (Astin, 1977; Baldridge, Curtis, Ecker, & Riley, 1978; Bowen, 1973, 1977; Meeth, 1974) Revenues (1970-1976) from:a

Federal government State government Local government Private gifts Endowment Tuition and fees

Total budget Value of endowment

Expenditures (1960-1976) for:a Research Student aid and student services Public service Academic support Library books Auxiliary enterprises Physical plant

Demographic-Context Variables (Baldridge et al., 1978; Bowen, 1977; Gar- barino, 1973; Kemmerer & Baldridge, 1975; Lupton, 1976; Silber, 1976; Vermilye, 1976) Affiliation (public/private)c Unionizationc Agea Highest degree offeredc Percent of terminal degree holdersa Types of programs offeredc Student/faculty ratioa Enrollmenta Number of facultya Number of departmentsa Size of librarya

aAbsolute values used. bRating from 1 = very high emphasis to 7 = no emphasis. cDummy coded. dRating from 1 = not at all important to 7 = extremely important.

32 March



each category along with the references to some studies associating the variables with organizational effectiveness. Internal reliabilities or coding schemes are also presented in the table for each variable. Interested readers are referred to Cameron (1978b) for a detailed theoretical justifi- cation for the inclusion of each variable and for additional psychometrics.

RESULTS

Effectiveness Dimensions

The same 9 dimensions of effectiveness found in Cameron (1978a) emerged in these 41 institutions. The dimensions are listed in Table 1. The internal consistency reliabilities for each of the dimensions range from .83 to .99. Average within-dimension correlations are higher than the outside- dimension correlations at the p< .001 level for each dimension, indicating that internal consistency and discriminant validity are acceptable. An in- terdimension correlation matrix revealed an average correlation in the 9x9 matrix of .39, indicating that several of the dimensions moderately covary across the 41 institutions. Oblique factor analytic results also pro- vide evidence of the clarity of the dimensions inasmuch as items from eight of the nine dimensions load highly on their own factors. (An oblique rota- tion was used inasmuch as the nine dimensions are not assumed to be or- thogonal. Factor analytic results are not reported here to conserve space, but they can be obtained from the author.) One of the dimensions, student academic development, does not load on any of the factors. These results show that the nine dimensions of organizational effectiveness as identified by the dominant coalition have high internal consistency reliability and statistically significant discriminant validity, although they do possess moderate intercorrelation.

Mean scores for each institution were examined across the nine dimensions. It was found that each institution displays a relatively unique pat- tern of scores on the dimensions. That is, no two institutions were rated as having identical profiles of effectiveness. MANOVA and univariate ANOVAs tested the statistical significance of these differences and, as reported in Table 3, significant differences exist among the institutions on each of the nine dimensions. No significant differences were found among the five different job categories, however, except on the system openness and community interaction dimension. That is, respondents in different job categories in the institutions did not differ significantly in their ratings of effectiveness on any of the dimensions except one. And in the case of that one dimension, the variance accounted for (r2)is only 1 percent.

Domain Identification

In order to identify the organizational domains represented by these nine dimensions and to assess effectiveness levels in those domains, the

1981 Cameron 33




TABLE 3 Multivariate and Univariate Analysis of Variance

for the Effectiveness Dimensions

Institution Job Institution x Job MA NO VAa F 0 F 0 F 0

42.86** .52** 1.59* .02 1.20 .04

Institution Job Institution x Job ANOVA Multiple R2 F q2 F n2 F

1. Student educational satisfaction .39 50.76** .38 2.13 .01 1.00

2. Student academic development .48 126.61** .48 1.12 .01 .82 3. Student career development .37 80.51** .36 .32 .01 1.40 4. Student personal development .23 13.56** .23 .78 .01 1.22 5. Faculty and administrator em-

ployment satisfaction .20 9.68** .18 1.67 .01 .45 6. Professional development and

quality of the faculty .44 89.30** .43 .50 .00 1.30 7. System openness and commu-

nity interaction .15 2.88* .14 2.58* .01 .72 8. Ability to acquire resources .52 83.60** .52 1.27 .01 1.64 9. Organizational health .16 12.24** .15 .74 .01 .54

aDegrees of freedom for institution were 36 and 4813; for job, 36 and 4813; and for the interaction, 144 and 10162.

*p<.05 **p< .001

nine effectiveness dimensions and the 41 institutions were clustered using the CONCOR algorithm. A matrix was formed in which institutional clusters were matched with effectiveness dimension clusters to form groups of institutions differing in domains and in effectiveness levels. These groupings form the domains of organizational effectiveness. The four clusters of effectiveness dimensions were:

(1) An external adaptation cluster of dimensions comprising student career development and system openness and community interaction. The criteria comprising these dimensions indicate that high scoring institutions are successful in interactions involving the external environment. The community involvement of the institution and the focus given to student preparation for outside-of-school employment are the two key dimensions, and both emphasize environmental interaction.

(2) A morale cluster comprising student educational satisfaction, faculty and administrator employment satisfaction, and organizational health. This cluster is concerned with student, faculty, and administrator satisfaction and with the health of internal institutional processes. Schools scoring high on this cluster are typified by high morale among organizational members and by high levels of trust, member commitment, conflict resolu- tion, etc.

(3) An academic-oriented cluster comprising student academic development, professional development and quality of the faculty, and ability to acquire resources. These dimensions relate to traditional academic

34 March



activities and to educational outputs, i.e., the academic development of students and the professional development of the faculty. At first blush, the ability to acquire resources dimension seemed not as central to the academic label as were the other dimensions. Closer inspection of the criteria comprising that dimension, however, shows that they relate to the ability of the institution to obtain high quality faculty, students, research grants, and other financial resources, and the consistency of those transactions with the label "academic orientation" seems reasonable.

(4) An extracurricular cluster comprising a single dimension, student personal development. These criteria relate primarily to personal, nonacademic development of students, and extracurricular activities.

Four groupings of institutions that possess similar scores on the effectiveness dimensions also emerged from the clustering procedure. Figure 1 presents the effectiveness profiles for the four institutional clusters across the nine dimensions of effectiveness. Two of these institutional groups score high on the academically oriented dimensions, consequently they are

FIGURE 1 Profiles of Effectiveness for Four Institutional Clusters

65-

60+

a,, \ / Scholarly- / Scholarly- 55 / High Morale / Medium Morale

o 55-- t X or/ /

.35-j -

IE 6 3 g SQ r) Q o CIS ov,

0

du0-

>< >

c

w C P>(^

1981 Cameron 35




given the label "scholarly institutions." These two groups differ, however, in their scores on the effectiveness dimensions relating to the satisfaction of students, faculty members, and administrators, and with internal organizational health. Therefore one group is labelled "scholarly-high morale" because it maintains the highest scores on the satisfaction and organizational health dimensions, and the other is labelled "scholarly- medium morale" because its scores are about average on the morale dimensions. A typical scholarly-high morale institution is one that is highly successful academically and has high morale among organizational members. An institution in the scholarly-medium morale cluster is typified by highly successful academic achievement but average member satisfaction and internal organizational health.

Another cluster consists of institutions scoring slightly below average on most of the dimensions of effectiveness. This group displays relatively little variance across the nine dimensions and does not excel in any domain of effectiveness. This cluster is labelled the "mediocre group" because of the average and below average levels of effectiveness displayed.

The final cluster of institutions shows extremely high scores compared to the other three clusters on student career development and on system openness and community interaction-the two external adaptation dimensions-and this group is labeled the "externally oriented group." As shown in Figure 1, however, this external group has low scores on all the other effectiveness dimensions. Hence, a school in this cluster is one that excels in the effectiveness domain relating to external transactions but does rather poorly in other domains of organizational effectiveness.

Differences Among Clusters

Table 4 presents the standardized mean scores for each grouping of effectiveness dimensions (domains) and institutional clusters as well as the

TABLE 4 Differences Among Groups of Institutions Across

Four Domains of Effectiveness (Standardized Scores, Mean = 50)

Domains External

Institutional Groups Adaptation Morale Academic Extracurricular

Scholarly-high morale (N= 5) 46.02 62.01b 63.45c 57.43 Scholarly-medium morale (N=4) 44.69 49.95 62.42d 55.42 Externally oriented (N=8) 58.81a 46.79 47.46 44.13 Mediocre group (N= 24) 48.08 47.28 46.81 49.96

aThe externally oriented group differs from the mediocre group and the scholarly-high morale group at the p < .06 level.

bThe scholarly-high morale group differs from all other groups at the p<.01 level. CThe scholarly-high morale group differs from the externally oriented group and the mediocre

group at the p< .01 level. dThe scholarly-medium morale group differs from the externally oriented group and the mediocre

group at the p< .01 level.

36 March



results of the F tests for significant differences among the means. Statisti- cally significant differences were observed among certain of the groups of institutions in a comparison of their effectiveness across the four domains. The externally oriented group, for example, differs from the other groups in the external adaptation domain at the p< .06 level. The scholarly-high morale group differs significantly from all other groups of institutions in the morale domain (p < .01). And both scholarly groups differ significantly from the other clusters in the academically oriented domain at the p < .01 level. No significant differences exist among any of the four groups in the extracurricular domain.

Predicting Institutional Differences

To explain these significant differences in domain effectiveness among the groups of institutions, discriminant analysis procedures were used em- ploying the variables listed in Table 2 as predictors. Because of degrees of freedom problems it was inappropriate to include all the variables in a single discriminant analysis. Therefore, each of the five categories of explanatory variables was included in a separate stepwise discriminant analysis in order to determine which variables are most powerful in discriminating among the institutions. Variables were kept only if they contributed significantly to the discriminating power of a statistically significant function as determined by a partial F of 1. Emerging were 14 variables, which were then included in a final discriminant analysis.

Table 5 reports the results of the final discriminant analysis, and Figure 2 plots the centroids for the three significant discriminant functions. Based on these 14 variables, 97.6 percent of the institutions can be correctly classified into their proper effectiveness cluster when the probability of being classified into each group is constrained to be equal (Klecka, 1975). Only one institution is incorrectly classified on the basis of its scores on these predictor variables. This analysis provides evidence that the resulting 14 variables are very powerful in explaining differences among the 4 groups of institutions. (Conducting two successive discriminant analyses for each variable, in reducing the data, capitalizes on chance; consequently, the discriminating power of the variables may be inflated.)

Each of the discriminant functions may be thought of as an important underlying dimension of differences among the institutional groups. Fur- thermore, each of these underlying dimensions (functions) is independent of the other functions; that is, the second function explains differences not accounted for by the first function, and the third function explains differences not accounted for by the first two functions. It is informative, therefore, to interpret each discriminant function individually with respect to the institutional groups. Correlations of the variables with the discriminant score are relied on for interpretation rather than the discriminant weights inasmuch as the correlations are not sensitive to intercorrelation among the explanatory variables (Bargmann, 1970; Perreault & Miles, 1978). Tatsuoka (1971) refers to these correlations as the structure matrix.

1981 Cameron 37




TABLE 5 The Fourteen Most Important Variables in

Discriminating Among the Four Clusters of Institutions

Function Eigenvalue Canonical Correlation Wilks' Lambda Chi Square d.f. Significance

1 9.94096 .953 .0129 134.815 42 .000 2 1.86670 .807 .1414 60.648 26 .000 3 1.46751 .771 .4053 28.000 12 .006

I II III Variable A B A B A B

Change in enrollment (51-75) .189 .406*** -.247 .094 .099 .054 Tuition charged -.398 -.745*** -.333 -.239 .196 -.095 Age of institution -.385 -.316** .474 .165 -.492 -.618*** Goal of career development -.498 -.826* * .344 -.061 -.281 -.007 Goal of faculty development .020 .512*** .429 .523*** .173 .111 Emphasis on fund raising -.180 .515*** -.127 .069 -.255 .029 Liberal arts program -.322 -.381** .418 .506*** .352 .212 Teacher training program .106 .156 .274 .453*** .249 .260* Professional program .214 .158 -.065 -.079 -.246 -.433*** State revenue for research -.133 -.313** -.357 -.437*** .311 .256* Revenue from endowment -.105 -.499*** -.367 -.360** 1.171 -.227 Value of endowment (71) .186 -.479*** .173 -.334** -1.297 -.466*** Expenditures/academic support -.189 -.127 -.223 -.314** .768 -.243 Total expenditures .230 -.111 -.180 -.170 -.492 -.445***

I = First discriminant function II= Second discriminant function III= Third discriminant function A= Discriminant function weight B = Correlation with discriminant score

*p< .05 **p< .01

***p< .001

The first discriminant function separates the two scholarly groups from the externally oriented and the mediocre groups. The centroids of the scholarly-medium morale and the scholarly-high morale groups fall on the negative side of the axis in Figure 2. The mediocre and external groups are on the positive side.

The two scholarly groups tend to be older liberal arts institutions with high revenues from tuition and endowment. Futhermore, they have high revenues for research and high endowment values. The distinguishing attributes of the external and mediocre clusters on this function, on the other hand, are an emphasis on fund raising, faculty development, and dynamic (growing) enrollments. This first discriminant function, therefore, distinguishes between well-established institutions and developing institutions. The scholarly institutions are characterized by attributes typical of wealthy, old, venerable universities, whereas the external and mediocre institutions appear to be engaged in the process of advancement and en- richment.

The second function mainly separates the scholarly-high morale group from the scholarly-medium morale group. Small differences exist between the external and the mediocre groups. The scholarly-high morale group is

38 March



FIGURE 2 Plots of Group Centroids for the Three Significant Discriminant Functions

II

- 1.0 +2.0 I

* 1.0 +2.

Scholarly- Medium Morale

-1.0

I

Externally Oriented Group

-2.0

Scholarly- High Morale

Group

Group

Scholarly-High Morale Externally Oriented Scholarly-Medium Morale Mediocre

Centroid I Centroid II Centroid III

-.84 -2.01 .04 .78 .02 -1.33

-2.34 1.09 -.51 .30 .23 .52

characterized by high revenues in endowment, a high endowment value, and by high research-oriented revenues and expenditures. The scholarly- medium morale group, on the other hand, is typified by liberal arts and teacher training programs and by faculty professional development. This discriminant function distinguishes between wealthy, research institutions and institutions with faculty development and teaching emphasis. Speak- ing more simplistically, the differences may be typified as teaching versus

39 1981 Cameron




research orientation, assuming that the wealth factors are associated with research institutions.

The third function accounts for differences not accounted for by the first two functions. This function distinguishes the externally oriented and the scholarly-medium morale groups (negative side of the axis) from the scholarly-high morale and mediocre groups (positive side of the axis). Var- iables such as high endowment value and high expenditures are coupled with older institutional age and the offering of professional programs in the external and scholarly-medium moral group. Teacher training and high research revenues, on the other hand, are typical of the scholarly- high morale and the mediocre groups. This function, therefore, may be in- terpreted as being a separation of "professional" institutions from "academic" institutions. The academically oriented groups (scholarly-high morale and mediocre schools) seem to be exemplified by traditional teaching and research emphasis, whereas the professionally oriented groups (external and scholarly-medium morale) appear to have high expenditures for professional programs. The differences might be stereotyped as being between schools emphasizing law, medical, engineering, and business degrees versus schools interested in nonprofessional teaching and research activities.

TABLE 6 Major Distinguishing Characteristics of the Institutional Groups

Institutional Group Major Distinguishing Characteristics

Scholarly-high morale group

Scholarly-medium morale group

Externally oriented group

Mediocre group

Affluent, Academic Institutions Charges high tuition High endowment revenue High endowment value High state revenue for research High expenditures for academic support Offers liberal arts programs

Affluent, Professional Institutions Charges high tuition High endowment revenue High endowment value High state revenue for research Goal of faculty development High total expenditures Offers professional programs

Developing, Professional Institutions High endowment value Emphasis on fund raising Goal of faculty development Growing enrollments High total expenditures Offers professional programs

Developing, Teaching Institutions High emphasis on fund raising Goal of faculty development Growing enrollments Offers teacher training programs

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Interpretations of Institutional Characteristics

The discriminant functions point out that different types of institutions differ in the domains in which they excel. Table 6 summarizes the institutional characteristics typical of each group of institutions. For example, scholarly-high morale institutions, which excel in the academic and morale domains, seem to be best typified by institutional wealth and research activity. Institutions that possess the characteristics of the scholarly-high morale group, therefore, might best be labelled affluent, academic colleges and universities.

Many of the variables indicating institutional wealth also are typical of the scholarly-medium morale group. However, there also is an emphasis among these schools on professional programs and professional development of the faculty. Thus, when characterized on the basis of their institutional characteristics, the scholarly-medium morale institutions are labelled affluent, professional institutions.

Institutions that excel in the external adaptation domain but do poorly in the other three domains are exemplified primarily by indicators of growing enrollment, fund raising, faculty development and the offering of professional programs (e.g., law, medicine, business). This mix of predictor variables suggests that the label developing, professional is an appropriate summary for the externally oriented cluster.

Finally, the mediocre group, those institutions that do not show distinctive competence in any of the domains, are typified as developing, teaching institutions because teacher training programs and indicators of institutional development (e.g., emphasis on fund raising, growing enrollments, faculty development) are typical characteristics.

DISCUSSION

These analyses show that four major domains of effectiveness exist for colleges and universities from the standpoint of the internal dominant coalition-an academic domain, a morale domain, an extracurricular domain, and an external adaptation domain. Furthermore, four groups of institutions are found to differ significantly from one another in their levels of effectiveness in these domains. These are (1) a scholarly-high morale group, which is rated as highly effective in the academic and morale domains but as very ineffective in the external adaptation domain; (2) an externally oriented group, which is highly effective in the external adaptation domain but ineffective in all other domains; (3) a mediocre group, composed of schools that score below average in effectiveness in all the domains; and (4) the scholarly-medium morale group, which excels in the academic domain, is average in the morale domain, and is ineffective in the external adaptation domain.

Each of these four groups of institutions is typified by a unique set of institutional characteristics (Table 6). Affluent, academic college characteristics are most closely associated with the scholarly-high morale group.

1981 41 Cameron




Affluent, professional college characteristics typify the scholarly-medium morale group. Characteristics summarized as developing, professional traits typify the externally oriented institutions, and developing, teaching characteristics are associated with the mediocre schools.

Significant differences existing among the four groups of institutions in their domains are associated with three major institutional characteristics-the type of academic program offered, institutional affluence, and institutional stability. On the basis of the discriminant functions, a parsi- monious summary of the findings would suggest that the types of institutions excelling in the academic effectiveness domain are wealthy, research oriented, liberal arts institutions; those excelling in the external adaptation domain are developing, professionally oriented institutions; and those excelling in the morale domain are well-established, stable institutions. All institutions seem to do about equally well in the extracurricular domain.

IMPLICATIONS

Three main implications of these results have relevance for organizational theorists and for evaluators of organizational effectiveness. They can be stated in the form of propositions.

1. Organizational effectiveness is a multidomain construct. Because each of the four major approaches to organizational effectiveness emphasizes a limited domain set, the complexities of organizational effectiveness and the multiple levels of effectiveness that are inherent in organizations frequently are ignored. That is, the use of only one of the four models of effectiveness may limit unwittingly the evaluator to a narrow set of relevant effectiveness domains. The system resource model, for example, is most closely associated with the external adaptation domain in colleges and universities, the process approach seems to parallel the morale domain, and the goal model may be compared to the academic domain.

If one defines and assesses organizational effectiveness on the basis of organizational goal accomplishment, for example, significant differences in effectiveness domains-which actually exist among colleges and universities and which may be very important to potential students, faculty, or funders-would be masked. Most of the institutions in this study would appear to be largely the same in effectiveness, as evidenced by the fact that the institutions are not distinguishable on the basis of their goals. On only one goal did the institutional groups differ significantly (Table 5).

Similarly, if effectiveness is defined simply as the ability of the organization to acquire resources from the environment (the system resource model), effectiveness in the morale domain, the extracurricular domain, and much of the academic domain would be ignored in colleges and universities.

Also implied is that different models of effectiveness may be relevant to different types of organizations. Cameron (1980) argues, for example, that none of the four models of effectiveness-the goal model, the system

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resource model, the process model, the strategic constituencies model-is appropriate in organizations such as colleges and universities because of the anarchistic nature of those organizations. Goodman (1979) argues not only that different models of effectiveness are needed for different types of organizations, but that appropriate models may differ even among organizational subunits. This is partly because domains of effectiveness are grounded in post hoc choices of organizational constituencies (e.g., dominant coalition members) regarding what organizational activities will be emphasized (Cyert & March, 1963), what the organization already knows how to do (March & Simon, 1958; Weick, 1979), and what criteria can be agreed upon (Lindblom, 1959). Different types of organizations with different dominant coalitions are not likely to produce the same domain sets.

This study illustrates that a general construct of organizational effectiveness that is applicable to all types of organizations and to all domains of organizational activity is not likely to develop. And, because of the multiple domain nature of the construct, a general model of effectiveness may not be very enlightening anyway.

2. When organizational effectiveness is viewed as a multidomain construct, the relationships among other organizational variables are altered. That is, the distinctive organizational characteristics of institutions of higher education that differ in their domain effectiveness illustrate one possible reason why confusing and contradictory findings have been reported in the literature examining various organizational level variables. Berger and Cummings (1979), Ford and Slocum (1977), and others, for example, conclude that relationships among variables such as organizational structure, technology, size, and the external environment are ambiguous and problematic. In most organizational studies, however, researchers have not controlled for the effectiveness of the organizations they have in- vestigated, let alone for the variety of "effectivenesses" typical of most organizations. Yet there is no reason to expect that the same relationships among variables (e.g., technology and structure) will hold in ineffective organizations as hold in effective organizations, and the relationships are likely to change in organizations with different patterns of effectiveness across domains.

Duncan (1973) and Lawrence and Lorsch (1967), for example, report that effective organizations are typified by different organizational structure-external environment relations than are ineffective organizations. Reimann (1974) found that industrial organizations that are rated as effective are different in structure from that of ineffective industrial organizations. Pennings (1975) found that structural variables are different for highly effective brokerage firms than for ineffective firms, although the goodness of fit between structure and environmental variables was not de- pendent on effectiveness.

This study points out how institutions may be typified by a unique pat- tern of organizational effectiveness across certain domains, and that each

1981 Cameron 43




major effectiveness profile may be associated with a different set of institutional characteristics. That is, not only may effective organizations be structured differently from ineffective organizations (Reimann, 1974), but organizations typified by success in one effectiveness domain may have different organizational characteristics than organizations with success in another organizational effectiveness domain. The focus on only one overall rating of effectiveness for an organization masks these findings. The relationship of institutional growth and effectiveness provides one example.

Norris (1976) suggests that institutions that are growing in enrollments differ in effectiveness from institutions that are static. In fact, growth has been a major indicator of effectiveness in higher education in the past (Dressel, 1971). What this study points out, however, is that growth is associated with ineffectiveness in the academic, morale, and extracurricular domains. Only in the external adaptation domain is enrollment growth associated with high levels of success. That is, in institutions typified by growth, effectiveness is rated low in academic, morale, and extracurricular domains and high in the external adaptation domain. This suggests that in periods of growth and dynamism, institutions trade off internal effectiveness (i.e., academic, morale, and extracurricular effectiveness) for effectiveness in adapting to the external environment. In periods in which little or no growth is experienced, the external adaptation domain may then become less important and internal effectiveness is emphasized.

It is proposed that organization level research begin to account for the effectiveness of organizations and the possible differences in effectiveness across domains before conclusions are drawn. Part of the confusion and contradiction in findings in macro organizational research may derive largely from treating organizations as if they have only one effectiveness domain, from ignoring organizational effectiveness as a control variable, and from not considering the possibility that effectiveness domain selec- tion may be a causal factor in determining structural, technological, and/or environmental interrelationships.

3. Organizational effectiveness in external domains may mitigate against effectiveness in internal domains. Dubin (1976) speculated that because organizations are ambivalent about whether to maximize internal organizational effectiveness or external organizational effectiveness, achievement of both is unlikely. According to his hypothesis, organizations are either internally successful or externally successful, but not both. This study's results seem to support Dubin's hypothesis. That is, institutions that are effective in the external adaptation domain are not effective in the internal domains (i.e., academic, morale, extracurricular) and vice versa. An examination of the relative rankings of effectiveness for each of the 41 institutions in the 4 domains reveals that no institution scored in the top 20 in every domain; and of the institutions ranked in the top 10 in the external adaptation domain, the average ranking in the academic domain is 22, the average ranking in the morale domain is 19, and in the extracurricular domain is 29.

44 March



On a pragmatic level, this implies that institutions of higher education that achieve the highest external visibility, and therefore may show up more often on prestige polls or ratings of institutional reputation, may be less effective in the traditional academic domain and in internal morale than are schools that don't make those lists. That is, schools rated as doing well academically are rated rather poorly in the external adaptation domain, and schools achieving high external adaptation scores do rather poorly in the academic domain.

If it is correct to assume that schools that are highly effective in the external adaptation domain achieve more external visibility, then it is important to interpret with caution the frequently published listings of "top" institutions based on prestige or general quality ratings (Ladd & Lipset, 1979; Cartter, 1966; Ross, 1977). These polls may represent just the re- verse of what potential students and administrators think they represent (i.e., high ratings equal low academic effectiveness).

This study serves largely as an exploratory step in identifying and predicting domains of organizational effectiveness, and more research is needed to expand and develop this notion. In institutions of higher education, for example, more refined measurements of the major predictor variables found to be important in differentiating organizational types are needed. One weakness of this study is the possibility of random error ef- fects because of the number of variables included and the data reduction procedures necessitated. Follow-up research should focus on the few predictor variables that appear to be key.

In other types of organizations, research efforts should begin to focus on domains of effectiveness rather than on overall assessments. This does not mean that the organizational level of analysis should be abandoned in favor of subunit or individual performance analyses. Rather it means that assessments should be sensitive to the different effectiveness domains pres- ent in organizations and the probability that different levels of effectiveness exist across the different domains. Furthermore, organizational effectiveness should begin to be used more widely as a control variable in organization-level research.

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